Gas Price Breakdown Sparks Larger Correction Fears

Natural gas prices have broken out of their consolidation range in July, as sellers have taken control and pushed the price below $2.80 to $2.99 support region.

The price had recently reached the range top at $2.989 before reversing sharply, and the subsequent slide has now pushed the price below the previous floor to trade around $2.767.

This breakdown suggests that a larger correction could be underway, with the Fibonacci retracement tool highlighting potential levels where sellers may pause or extend their decline further.

The 38.2% Fib level aligns with the broken range support at $2.798, while the 50% level is at $2.739, just below current price. A deeper selloff could reach the 61.8% Fib at $2.680, which is close to where the range lows had been forming earlier this month.

Additionally, the moving averages are converging, with the 100 SMA curling lower and approaching the 200 SMA, hinting that a bearish crossover could be imminent. Price is trading below both indicators, which could now act as dynamic resistance on any bounce, reinforcing the case that the path of least resistance is to the downside.

The stochastic is diving toward the oversold region, reflecting strengthening bearish momentum. However, the lack of room left to fall means a bounce or period of consolidation could materialize soon.